The Difference Between Royal Wedding and Royal Baby on UK Economy

By Susanna Kim July 22, 2013

(Credit: Anwar Hussein/WireImage/Getty Images)

While not all people outside the U.K. have great interest in the "royal baby" birth, there is one aspect of British tradition that may have traders and those in commerce pleased about "royal baby" news: There will be no closure of British businesses and financial markets.

Any economic impact from the royal birth should be positive, said Howard Archer, chief European and U.K. economist with IHS Global Insight, which is in contrast with the Queen's Diamond Jubilee celebrations in 2012 and the royal wedding in 2011, both of which meant an extra public holiday to celebrate the events.

"A major difference is that there was an extra day's public holiday with the royal wedding, which did have a negative impact on the economy through hitting activity," said Archer. "However, there were more street parties and pageantry involved with the royal wedding. The street parties may have had more of an impact in lifting sales of food and drink, while the greater pageantry may have had a small impact in lifting tourism."

In Photos: Royal Baby Souvenirs

It doesn't hurt that some economists have predicted a $400 million boost in economic activity as a result of the royal baby, in part because of a boost in consumer confidence due to a "feel good factor".

On previous royal-related holidays, economic output, services activity and retail sales took a hit. While some of this lost economic activity was subsequently made up, there was "undoubtedly a significant overall loss," said Archer.

However, with the more private celebrations around the royal baby, there may not be the same beneficial impact from tourism that came with the pageantry and celebratory public events surrounding the other royal events, Archer said. Nevertheless, in the last day or so, the international media attention surrounding the royal baby is arguably one large publicity campaign for the United Kingdom.